A strong rise in German exports outstripped gains in imports to power growth of 0.4% in Europe’s largest economy in the second quarter, data showed yesterday.
The outlook for industrial companies is buoyed by full order books, but investments flagged in the quarter, clouding the picture as concerns over a global economic slowdown intensify.
The figures from Germany’s Federal Statistics Office showed Germany’s export engine, traditionally its major growth driver, was in rude health at the mid-point of 2015.
Exports rose by 2.2% on the quarter in the April-June period, outperforming a 0.8% increase in imports.
This meant that foreign trade added 0.7 percentage points to GDP while domestic demand subtracted 0.3 percentage points.
However, gross capital investment subtracted 0.1 percentage points from GDP and inventories deducted 0.4% as companies ran down stocks.
“Companies are not investing as they really should,” said Ulrike Kastens at Sal Oppenheim.
“The low interest rate is not decisive for them, but rather developments in key markets.
"Here there are major question marks, as developments in China and other emerging markets show.”
Earnings by German companies have been exceeding expectations, though they are concerned about the uncertain global outlook.
Germany’s benchmark DAX share index fell 4.7% on Monday following a rout in Chinese markets.
Around half of Germany’s 30 blue-chip companies reported consensus-beating financial results for April-June.
More than two thirds, nonetheless, stuck with their guidance for the year as a whole as political and economic uncertainties remain in focus.
In positive news for the economic outlook, figures released earlier this month showed industrial orders recorded their biggest gain since early 2011 in April-June thanks mainly to strong foreign demand.
Meanwhile, another survey showed yesterday that German business morale improved in August, suggesting company executives in Europe’s largest economy are encouraged by the agreement of a new bailout for Greece and robust demand.
The Munich-based Ifo economic institute’s business climate index, based on a monthly survey of some 7,000 firms, rose slightly to 108.3 in August from 108.0 in July.
Germany’s budget surplus stood at €21.1bn, or 1.4% of GDP in the first half of 2015, the Federal Statistics Office said yesterday.
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